The BSE Sensex and the Nifty rose on Thursday to a one-week high, marking a second straight session of gains as Infosys continued to gain ahead of its quarterly results on Friday, while ICICI Bank rose on attractive valuations after recent steep falls.
Gains also came after both the Dow and the S&P 500 ended at record highs, while Asian shares were further underpinned by data showing a surge in local currency loans in March.
Analysts expect the near-term trend to be determined by Infosys Ltd's
A consensus forecast by a Reuters poll of 26 economists showed factory production likely fell by 0.7 percent in February on a year earlier, due to a contraction in infrastructure industry output and flagging demand, after a surprisingly strong rise in January.
"Infosys results, which is expected to surprise the market positively, and IIP numbers would be the near-term catalysts for the market," said Deven Choksey, managing director of KR Choksey Securities.
Some buying is happening at lower levels as benchmark indexes have come close to support at 5500, added Choksey.
The Sensex rose 0.69 percent, or 127.75 points, to end at 18,542.20, marking its highest close since April 4.
The Nifty rose 0.64 percent, or 35.30 points, to end at 5,594, its highest close since April 3.
Foreign investors paring some holdings in last few sessions, due to lingering concerns on domestic economy and political instability, led the benchmark indexes earlier this week to their lowest close since the government's "big bang" reforms in September sparked a powerful rally.
Economists polled for the latest quarterly survey lowered their growth forecast for Asia's third largest economy for the eighth consecutive time.
Gross domestic product will increase 6 percent in the current fiscal year to March 2014 after it grew at a decade-low of 5 percent in the previous fiscal year, according to a median forecast of 27 economists.
Tech shares gained for a second day as previous losses are seen as overdone: Infosys rose 3.6 percent ahead of fiscal 2013 earnings.
HCL Technologies Ltd
HCL may be the only one among India's big four IT stocks to beat January-March earnings consensus forecasts, according to Thomson Reuters StarMine data.
StarMine's SmartEstimates shows HCL Tech would report an EPS of 13.34 rupees for the quarter compared with mean consensus estimates of 12.48 rupees. SmartEstimates measures the forecasts of only top-ranked analysts.
By contrast, Infosys, TCS and Wipro Ltd
ICICI Bank Ltd
Tata Motors Ltd
Titan Industries Ltd
However, shares in Jet Airways India Ltd
Bharti Airtel Ltd